Interview by Rikki Stancich

Wind Energy Update:  While a one-year extension to the payment of 1603 section grants in lieu of the production tax credit late last year was welcomed by the US wind industry, it has not resolved the issue of uncertainty in the sector from an investment perspective. Are we likely to see a policy framework put into place any time soon that would provide greater long-term certainty for the sector?

Ed Weston: That’s the question everyone in the US is asking. Polls indicate that the majority of American favour the growth of alternative energy, especially wind power.  How the Congress chooses to act, however, remains to be seen. There is talk of something new - a Clean Energy Standard - in which nuclear and clean coal would be considered as part of the legislation.

Wind Energy Update: Factors such as market availability, transportation costs and currency fluctuations provide a strong argument for the build out of a domestic turbine component supply chain in the US. What are the key hurdles to developing a domestic supply chain / where are the major bottlenecks? 

Ed Weston: Probably the biggest issue US manufacturers face is competitiveness.  It starts with the head start that their supply chain competitors obtained when the wind industry migrated from American to Europe in the 1980’s.   

Unlike many US companies, some of  whom are now hustling to manufacture what’s for them a new wind part, European and some Asian suppliers have been building them for a long time, increasing quality and shaving off costs each year.  The result is that US parts sometimes cost more based on the learning curve.

There are also widespread concerns that currency manipulation and government subsidies create a less-than-level playing field when US manufacturers compete head-to-head against some Asian products.

Wind Energy Update: What policies need to be introduced to address these issues/bottlenecks?

Ed Weston: Long-term market stability (such as provided by a RES) and access to affordable capital (extension of 48c) are two needs that can and should be addressed to help US manufacturers to invest in the most modern production equipment and facilities. That is needed and straightforward from a policy perspective.

The level-playing field issue is more complicated to resolve.

Wind Energy Update:  Does the domestic content requirement for wind projects receiving government support risk making US wind manufacturers uncompetitive / pricing wind energy out of the market? 

Ed Weston: That doesn’t seem to be happening.  AWEA reported last month that prices of wind power generated from a number of 2011 wind farm installations that were extremely competitive. 

Wind Energy Update: What progress has been made on resolving US transmission issues? Can we expect to see any progress on this in 2011? 

Ed Weston: Progress is being made on a regional basis, and when that happens it drives wind farm development around it. 

Unfortunately, extending the grid doesn’t seem to be getting much of a national push today, given the current low prices for natural gas, the prospects for tapping into reserves with new drilling methods, and the American bent for cheap electricity.

To respond to this article, please write to the editor:

Rikki Stancich: rstancich@gmail.com

Ed Weston will be presenting on US wind energy policy initiatives at the forthcoming Wind Energy Update supply chain conference in Detroit, April 5-6.